- Nerd Wallet study points to five home renovations that are questionable in terms of improving a home’s market value.
- Nerd Wallet suggests homeowners pay attention to how long they plan to stay in the house before doing large, costly renovations in their home.
- Nerd Wallet suggests homeowners consult with experts to help evaluate potential ROI on renovations.
All home renovations are NOT created equal when it comes to generating a positive return on investment (ROI) upon resale. Here are five home renovations that do not help homeowners improve their homes’ market value, according to the latest report entitled 2019 Cost vs. Value Report from NerdWallet.
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- A chef’s quality kitchen.
- NerdWallet found that a chef’s quality kitchen recoups only 59% of its cost in terms of added value to a home.
- “If you do marble countertops and high end appliances, you could spend $100,000 and it doesn’t mean that your house is worth an extra $100,000,” said Beatrice de Jong, the consumer trends expert with
- Simple, smaller scale kitchen upgrades can yield more ROI – think GE rather than SubZero and granite countertops rather than marble.
- Do-It-Yourself Painting
- DIY painting jobs sound as though they would save money in the doing and generate the same positive ROI. Think again…many DIY painting jobs that show streaks, chips and low quality can wind up costing the owner -$1,700 off the home’s sale price, according to
- “A good paint job is not easy. Hiring a pro can help solidify better value results,” said Sarah Cunningham, a real estate agent with Ethos Design and Remodel in Boise ID.
- An expanded master suite
- Again, an expanded master suite by making two bedrooms one sounds like a good idea but losing one bedroom in a smaller house can translate into a lower selling price.
- Plush wall-to-wall carpeting
- Wall-to-wall carpeting is past tense and often drops the home value by some $3,800-$4,000, according to
- Wall-to-wall carpeting can make a home look dated and can be unattractive to first-time buyers.
- According to The National Association of REALTORS®, sellers could recoup the entire cost of either installing or refinishing hardwood flooring.
- In some cases, NAR suggests that hardwood flooring could add $1.06 for every $1.00 spent on installing/refinishing hardwood flooring.
- A swimming pool
- According to Liede DeValdivelso, an agent with the Keyes Company in Miami Dade, a swimming pool does not enhance the home’s value if/when the owner sells the house.
- If the owner of the house, however, enjoys having and using a swimming pool, by all means the owner ought to have a pool.
- Many buyers, on the other hand, are simply not interested in having ongoing pool maintenance costs.
On the plus side, NerdWallet encourages homeowners use the following factors to help them determine whether or not renovations are worth the cost:
- Tenure of homeownership
- If the owner intends to stay in the home for a good period of time, make whatever renovations wanted and enjoy them
- If the owner intends to move sooner rather than later, make choices that will appeal to the home’s target market and that are consistent with comparable homes within the neighborhood.
- Consult with an expert
- “Interior designers can help tell owners about both short-term trends and long-term classics,” said Sarah Cunningham, the agent with Ethos Design and Remodel.
- A building contractor can also tell homeowners what would be involved both time-wise and money-wise for a proposed renovation.
- An appraiser can do a feasibility study to estimate the home’s current market value and the home’s likely value once the renovation is complete.
- Take a look around the neighborhood
- Go to some neighborhood open houses to get a sense of what renovations have been added or not in comparable homes currently on the market
- Compare choices being considered to neighborhood norms to ensure that the owner’s choices are in alignment with comparable properties.
Know also that the Joint Center on Housing Studies at Harvard University stated in a recent report that homeowners are expected to spend less on renovations and repairs this year. On the other hand, Opendoor recently announced a feature that allows buyers to customize their homes prior to moving in to their newly purchased homes.
Thanks to NerdWallet’s Kate Wood and OpenDoor for source data.